Why Saving for Our Kids’ Education Is Not Our Top Priority

When it comes to providing, a parent’s job is never done. Food, shelter and clothing barely scratch the surface. What about college, weddings and help as children start their first careers? Balancing those latter costs with the priority of saving for your own future costs, like retirement, is tricky at best.

I spoke with investors who proudly admitted they had saved up a significant amount of money for their children’s college education at the expense of their own retirement savings. While I applaud the desire to help your child pay for college, I believe it shows a misaligned priority and one that my wife and I hope to avoid. I’m not saying that we’re aiming to be part of the 50 percent of parents who aren’t saving for college, but simply that, as a priority, college savings must come after saving for retirement.

Retirement Planning Should Be Job No. 1

I know this isn’t a popular statement, but it’s my opinion that retirement planning should be the primary concern of most parents, with saving for college being a distant second. The average millennial will need at least $1.6 million if they retire at 65, so it’s safe to say that regardless of your age, you’re going to need a sizable chunk of money to enjoy a relatively secure retirement.

What tugs on parents’ heartstrings is the nagging feeling that prioritizing retirement saving ahead of saving for a child’s college education equates to loving your children less than yourself. I understand that feeling, on one level, but it shows a misplaced priority, in my opinion. There are loans and scholarships for college. Nobody is going to give you a scholarship for retirement.

We Don’t Want to Be a Burden to Our Children

The main reason my wife and I aren’t prioritizing saving for college is because we don’t want to be a burden on our children as they get older. Whether or not we like it, putting their college accounts ahead of our retirement accounts will only hinder our efforts build up the nest egg we’ll need to. That might not seem like as big an issue now, but fast-forward 20 or 30 years, and the lost investment time will be felt.

What gets lost in the saving for retirement vs. saving for college debate is what is in the best interest of the child long-term. Putting enough away to fully fund a college education is great. However, what good are you to your children if you need to live with them as you age because you didn’t prepare for yourself? That also assumes they’ll be in a position to help you. If they’re not, then what becomes of you? Of course, that’s the extreme end of the spectrum, but it highlights the importance of finding a healthy balance.